Corker Breathes New Life Into Financial Reform In The Senate?

Senate Banking Committee Chairman Christopher Dodd (D-CT) sent out another press release today on the status of financial reform. Just last week, he made an extremely pessimistic statement indicating that he had abandoned a bipartisan bill. I indicated that could mean the death of financial reform. But today, we learn that a Republican Senator on the committee, Bob Corker (R-TN), is willing to work with Dodd on the bill. Could this lead to a bill passing in the Senate after all?

First, here's Dodd's brief statement, in case you want to see exactly what he said:

"For over a year, the Senate Banking Committee has been grappling with how best to address the many problems that led to the financial crisis."

"In that time Senator Corker has proved to be a serious thinker and a valuable asset to this committee. For that reason, I called him Tuesday night and asked him to negotiate the financial reform bill with me. We met in my office on Wednesday and given the importance of these issues he agreed."

"While many difficult questions remain, financial reform is in a strong position due to the good work done by Banking Committee members, both Democrats and Republicans, to work out this bill."

"I am more optimistic than I have been in several weeks that we can develop a consensus bill to bring about the reforms the financial sector so desperately needs to prevent another economic crisis."

It's definitely a significant development that even one Republican is willing to work with Dodd. After all, if they all stubbornly refused to vote for the bill, then they could easily block it, with their 41 votes. And if all Democrats go along, one Republican vote is all it would take.

But therein lies the first question: will all Democrats go along? I'm not so sure. I recently mentioned that the banking lobby is flexing its muscles. Banks have made it clear that they're unhappy with Democrats, and during a mid-term election year, some Democrats must be listening.

I also wonder what this bipartisan bill will look like. Dodd will have to compromise to get even Corker on board. What proposals will be lost or substantially changed? Will the consumer financial protection agency survive? How about the Volcker Plan? Will they ruin the non-bank resolution authority?

I wonder if what's really going on here is just politics. Maybe Dodd could have made essentially the same compromises with the committee's ranking member, Senator Richard Shelby (R-AL), but wanted to punish him for being so difficult, and work with a different Republican instead. Either way, I think that, if you get a bill that succeeds, it will be a very watered-down version of the legislation the House passed in December.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation.